The impact of government intervention on housing market network: Evidence from the Seoul metropolitan area

Leehyun Jung, Youngsig Jun, Minhyuk Jeong, Yena Song and Kwangwon Ahn

Chaos, Solitons & Fractals, 2025, vol. 200, issue P3

Abstract: This study investigates how government intervention affects the information flow within a housing market network with a case study of the Seoul metropolitan area. We analyze weekly apartment price indices from 30 cities in the metropolitan area, exploring how varying levels of government intervention can influence information dynamics in the housing market. Centrality analysis in a housing market network over the entire sample period revealed that Suwon and Hwaseong (home to major electronic companies) are central hubs, while Seoul's role is insignificant. Also, a structural change in the housing price trends was noted in the short- and long-run after a political shift characterized by increased governmental intervention, which appears to influence heterogeneously across different regions. Accordingly, we further conducted network centrality analyses for two sub-periods to identify whether significant shifts occurred in the informational role of cities after increased governmental intervention in housing markets. The results reveal that strengthened government intervention in housing markets that concentrated on Seoul degraded the quality of housing market information in the capital city, weakening its role within the network. The weakened role of Seoul after the increased intervention can be attributed to a higher and increasing proportion of speculative transactions. These findings underscore the potential unintended consequences of excessive government regulation and highlight the need for more nuanced policy approaches.

Keywords: Government intervention; Information flow; Network analysis; Metropolitan area (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chsofr:v:200:y:2025:i:p3:s0960077925010288

DOI: 10.1016/j.chaos.2025.117015

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